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coronavirus
Coronavirus
VERY HIGH
Source: covid.gov.pk
Pakistan Deaths
29,097
2024hr
Pakistan Cases
1,367,605
7,58624hr
Sindh
523,774
Punjab
462,323
Balochistan
33,910
Islamabad
117,436
KPK
184,455

ISLAMABAD: The Federal Board of Revenue (FBR), Monday, informed the Senate Standing Committee on Finance that the 17 percent sales tax imposed on crude oil is an adjustable tax, which would help the FBR to have funds, despite the facility of sales tax adjustment.

During the review of the Finance Bill 2021-22, Senator Saleem Mandviwalla asked the FBR officials to explain the rationale behind the imposition of a standard rate of 17 percent sales tax on the import and supply of crude oil.

The imposition of 17 percent sales tax on crude oil is inflationary.

“If the tax is adjustable then why the FBR has imposed sales tax on crude oil,” he questioned.

Secretary Sales Tax (Budget) informed the committee that the crude oil was zero-rated for the last many years.

Now 17 percent sales tax has been imposed on crude oil.

It is an adjustable tax, but the FBR would be able to have funds through imposition of this tax on crude oil.

Senator Mandviwalla again questioned that if crude oil was zero-rated for the last 10 years then what is the logic behind this levy.

Why the FBR has not imposed a lower rate of sales tax on crude oil to check inflation?

The FBR official responded that the facility of sales tax adjustment is not available to the items subjected to reduced rate of sales tax.

The sales tax adjustment is only available to those items subjected to standard rate of 17 percent sales tax.

Committee members including Chairman of the Committee Senator Talha Mahmood strongly opposed imposition of 17 percent sales tax on crude oil.

Senator Sherry Rehman stated that there is a parallel mini-budget running along with the current review of the Finance Bill 2021-22 at the Parliament House.

It is a parallel budget going on in the form of inflation, price increase of daily items, gas cess, and levy on petroleum products.

When we are debating on the Finance Bill, why a parallel budget is running in the country.

There is no transparency in the process of budget finalisation as the actual budget is taking place outside the Parliament House.

During the meeting, Senator Talha directed the National Tariff Commission (NTC) to resolve the issue of Filament Yarn Manufacturers Association.

He further directed the NTC that the commission must protect the domestic industry and discourage commercial importers.

The NTC officials informed the committee that the National Tariff Policy Board meeting would address all the issues of domestic industries including filament yarn manufacturers.

Senator Shibli Faraz stated that each recommendation of the committee must accompany the revenue impact of acceptance or rejection of the taxation proposals of the Finance Bill 2021-22.

The Committee must know the positive or negative revenue impact of each recommendation of the Senate Finance Committee.

To discourage exemptions, Faraz stated that there should be some symbolic tax on exempted items.

Even the government may impose only Re1 as tax on exempted items, but there must be some symbolic tax.

During the discussion on the tariff reductions on the import stage, he pointed out that it is easy to collect taxes at the import stage as compared to the retail stage, Faraz added.

The private Hajj, Umrah tour operators requested the parliamentarians for the restoration of the fixed tax scheme, which was allowed during the tenure of the PML-N.

The fixed tax was passed by the Parliament and whenever we go to the FBR, the tax authorities have the same stance that only Parliament can restore the said tax.

They informed the committee that the unnecessary notices to lockdown affected the business community associated with Hajj, Umrah tour operators is highly deplorable.

The offices of the Hajj operators have been sealed by the FBR’s field formations on account of non-payment of withholding tax.

The matter of tax from Hajj operators is pending before the higher courts.

The Senate Standing Committee on Finance directed the FBR to examine the letter of the Hajj operators and also directed the Ministry of Religious Affairs and Interfaith Harmony to give its viewpoint on the issue.

Copyright Business Recorder, 2021

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